Cash Management is having the right amount of money in the right place at the right time to meet government obligations; secondly meeting these obligations in the most cost-effective way.

The Treasury Department within the Ministry of Finance, Economic Planning and Development is charged with the responsibility to manage national resources mobilization, forecasting and allocating of national resources sustainably. The functions are carried out in the different divisions within the ministry namely; Budget Division, Revenue Policy Division, Economic Affairs Division and Debt and Aid Division.

The Accountant General’s Department within the Ministry is responsible to design, develop and provide high quality financial management and accounting systems and services to the public sector in line with national and international standards and practices within the public sector.

The Cash Management function was therefore fragmented and performed by Divisions within the Treasury and Banking and Asset Management Division in the Accountant General’s Department.

Due to the fragmentation of the cash management function, the cash flow planning aspect was compromised as the responsibility of analyzing the consolidated cash flow plans and monitoring of the same was not properly undertaken.

The Cash Management Unit (CMU) was therefore set up in November 2016 to strengthen fiscal responsibility of the Government of Malawi (GoM) by undertaking and coordinating strategic and operational processes to ensure that GoM has the liquidity to acquit all its obligations in a timely, efficient and effective manner. This has resulted into better collaboration with the respective Divisions in the Treasury Department (i.e. Budget, Economic Affairs, Debt and Aid Management and Revenue Policy Divisions), Economic Planning Department, Accountant General Department, Reserve Bank of Malawi and Malawi Revenue Authority for better coordination of the cash management function and collaboration with debt management.

The Cash Management Unit is therefore mandated to undertake the following functions:

• Analyze and consolidate cash flow plan both on the inflow and expenditure side
• Undertake a cash flow forecast (on a yearly, quarterly, monthly, weekly and daily basis) using approved cash flow projections from MDAs, Malawi Revenue Authority (MRA), Debt and Aid Division (DAD), and Revenue Policy Division (RPD), as well as bank balances from RBM and Commercial banks.
• Develop and recommend periodic spending ceilings for submission to the CMC and CMTC.
• Monitor Malawi Government Account Number 1 (MG1) inflows, outflows and balances and other activities on the MG1 and related GoM accounts, and review the reconciliations on a daily basis.
• In liaison with Accountant General’s Department target balances of the MG1 and use the information in the forecasting model.
• Liaise with the Economic Affairs Division to ensure consistency between the consolidated cash flow matrix and the fiscal framework throughout the financial year.
• Collaborate with RBM and DAD on the development of the debt issuance calendar.
• Develop policies, procedures, guidelines, templates, instructions and manuals on Cash Management for GoM.